420 Bob

The rates space has foiled the promulgated narrative of the media crowd. Monday, and for a few hectic hours Tuesday morning, the ridiculous idea that falling 10 year rates "were telling us something (that was leading to stock selling)" was the meme du jour. As we pointed out, this gross misunderstanding of, flows, low rates and macro economics is a convenient retro-fit for unexpected or knee knocking equity drops.

The fairly stable and attenuated range in the term structure is providing support to the economy. Corporations are utilizing the extended exit concept to lock in financing into 2020. Consumer balance sheets continue to heal and the Siren Song of borrowing is faintly tickling their ears from far away shores. As the annual smoke-in known as 420 Day approaches, the markets have inhaled a big toke of reality ...and chilled.